Kraken has announced a strategic partnership with Backed Finance (BackedFi) to bring tokenized US equities to global investors.
Why xStocks?
As part of this collaboration, Kraken announced plans to launch a new service, commonly known as ‘xStocks’ for tokenized stocks.
BackedFi is set to launch the ‘xStocks’ program on the Kraken platform in the coming weeks. While the new service will be available across global markets in Africa, Latin America, Asia, and Europe, US clients won’t be able to access this service. Users from these regions will soon be able to access these tokenized assets directly through the Kraken mobile app.
The ‘xStocks’ service will start offering products, including over 50 US stocks and ETFs like Nvidia, Tesla, and Apple, among others. The service will offer a more simplified and affordable approach that enables non-US clients to access US stock assets, with trades operating around the clock 24/7. According to the report, these tokenized equities will mimic the price movements of underlying stocks and ETFs.
The new service is set to be developed on the Solana blockchain, with tokens backed by real assets held by BackedFi. Kraken chooses Solana as the launch platform for xStocks due to its extraordinary performance, high transaction speed, and growing ecosystem accessible worldwide.
Lastly, Kraken plans to partner with global regulatory authorities to ensure the fulfillment of legal expectations amid increased regulatory scrutiny of tokenized assets. The platform made this move following past unsuccessful efforts by other exchanges to launch such services due to legal barriers.
The emergence of tokenized stocks
The partnership between Kraken and BackedFi is a testimony that tokenized stocks are no longer an experimental idea – they are an integral component of the advancing financial ecosystem.
With the rising demand for real-time trading, global reach, and transparency, on-chain equities are gaining interest. These assets are digital-driven representations of traditional stocks, enabled by blockchain technology that transforms these RWAs into digital tokens.
Global investors can now invest in tokenized equities whose trading operates 24/7, whose settlements are executed instantly, and are much more affordable than the costs of traditional stocks.
This shift is being enabled by forward-looking fintech firms that are committed to eradicating impediments facing access to traditional finance and allowing people worldwide to interact with tokenized stock markets in their own way.
